Credit card debt smashed another record high at the end of 2023
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Americans are increasingly turning to their credit cards to cover everyday expenses, with debt hitting a new record high at the end of December, according to a New York Federal Reserve report published Tuesday.
In the three-month period from October to December, total credit card debt surged to $1.13 trillion, an increase of $50 billion, or 4.6% from the previous quarter, according to the report. It marks the highest level on record in Fed data dating back to 2003 and the ninth consecutive annual increase.
There was also an uptick in borrowers who are struggling with credit card, student and auto loan payments. As of December, about 3.1% of outstanding debt was in some stage of delinquency, up from the 3% recorded the previous quarter but still down from the average 4.7% rate seen before the COVID-19 pandemic began.
«Credit card and auto loan transitions into delinquency are still rising above pre-pandemic levels,» said Wilbert van der Klaauw, economic research advisor at the New York Fed. «This signals increased financial stress, especially among younger and lower-income households.»
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Visa Inc. credit and debit cards are arranged for a photograph in Washington, D.C., on April 22, 2019. (Photographer: Andrew Harrer/Bloomberg via Getty Images / Getty Images)
Credit card delinquencies continued to rise from their pandemic-era lows in the fourth quarter. The flow of debt moving into delinquency hit 8.5% in the fourth quarter at an annualized rate, compared with an 8.01% uptick
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